Activities by Segment: Value Services Segment

Making "au Smart Pass" and Other Membership Services More Attractive

As of the end of March 2016, "au Smart Pass" members numbered 14.47 million, an increase of 1.58 million from March 31, 2015. In our "Video Pass" service, in August 2015 we became the first communications carrier [1] in the Japanese video distribution business to utilize big data [2] to begin co-production of original content tied to terrestrial broadcast programming. We have also begun providing "Video Coins" and "Uta Coins" that can be used to pay for video rentals or to purchase music, as a way of giving something back to "Video Pass" and "Uta Pass" members.

[1]

As of August 20, 2015. Research by KDDI.

[2]

Limited to statistical analysis data (not including information that could identify an individual) for which customer consent has been obtained through "Video Pass," "au ID" and other end user agreements.

Cultivating New Services

In March 2016, J:COM acquired 50% of the shares of Jupiter Shop Channel (Shop Channel), the country's largest television shopping business.

At the same time, KDDI acquired 5% of the shares in Shop Channel held by Sumitomo Corporation. With this investment, we will offer a new service combining the smartphone with television shopping, as we work to achieve sustained improvement in the KDDI Group's corporate value.

Taking on New Commerce Services

In a collaboration with LUXA, Inc., a consolidated subsidiary, in August 2015 KDDI began offering a new internet shopping service called "au WALLET Market powered by LUXA," in which carefully selected products and experiences are easily available for purchase via smartphones, personal computers and tablets.

In addition to product sales, the service offers unique products such as fine dining and theater tickets through limited-time sales.

Expanding the Financing Business

In May 2015, KDDI entered into a capital and business tie-up with LIFENET INSURANCE COMPANY. With this alliance, we entered into the internet life insurance field, adding to our existing initiatives in internet banking (Jibun Bank) and internet general insurance (au Insurance).

Beginning in April 2016, we have restructured some financial products provided by companies in which we have invested under the au brand, and have begun offering in-shop support by qualified staff at our au shops, as well as discounts for packages that combine these products with au communication services as part of our effort to expand the "au Economic Zone."

[Solving Social Issues Through Business] Active Support Using Twitter (R)

With the widespread use of smartphones and the sudden growth in the number of social media users, customer concerns and complaints previously invisible are now taking the form of "tweets", and widely proliferated.

Instead of waiting for customer inquiries by phone or at our au shops, we are using Twitter (R), one of the most powerful SNS platforms, to dynamically seek out and approach customers about their concerns and complaints, an initiative known as "Active Support." We may be able to solve issues by answering "tweets" not intended as inquiries with responses such as, "We saw your tweet and may be able to assist you. Please tell us more." This service has received strong recognition from outside the company, because by responding on an open platform such as social media, we can reach out to many other customers at the same time, resolving their concerns and complaints as well.